The Solomon Islands Government has secured USD 55.9 million in additional financing from development partners since June to advance the Tina River Hydropower Development Project on Central Guadalcanal.
The funding package includes:
- World Bank (IDA) – USD 25 million (USD 12.5 million grant + USD 12.5 million loan)
- Asian Development Bank (ADB) – USD 25 million loan (under review)
- DFAT (Australia) – USD 4.5 million grant (USD 2.8 million for road diversion; USD 1.7 million for Project Office)
- APIP Trust Fund – USD 1.4 million grant (for Project Office)
Minister of Mines, Energy and Rural Electrification, Derrick Manu’ari, told Parliament that negotiations are continuing with the Global Climate Fund (GCF) and Economic Development Cooperation Fund (EDCF) / Export-Import Bank of Korea (KEXIM) to secure the remaining balance.
The original financing package comprised USD 10.8 million in equity contributions and USD 201.25 million in grants and loans. However, due to unforeseen delays, an additional USD 75.32 million is now required, covering:
- USD 8.0 million – Contractor prolongation (Hyundai Engineering Company)
- USD 37.3 million – Additional escalation reserve
- USD 16.72 million – Additional costs for THL, including insurance premiums
- USD 10.5 million – MMERE Project Office operations
- USD 2.8 million – Access road diversion at Managikiki
In May 2025, a government delegation to South Korea secured an USD 11 million concessional loan from EDCF/KEXIM at a 0.018% interest rate.
The World Bank and GCF also committed to supporting a USD 34.35 million grant application, to be considered at the October 2025 GCF Board Meeting.
Minister Manu’ari said Cabinet considered three financing scenarios and endorsed Scenario 3, which declines the ADB loan in favour of GCF grants and EDCF concessional loans. This approach delivers the lowest projected electricity tariff of USD 0.196/kWh.
Cabinet decisions include:
- Endorsing the additional financing cap at USD 75.32 million
- Capping total project financing at USD 223.45 million
- Rejecting any further financing or escalation requests
- Approving negotiations for a USD 10.07 million EDCF/KEXIM loan
- Approving preparation and submission of the USD 34.35 million GCF grant application
- Approving IDA’s USD 25 million financing package
- Directing ministries to coordinate with the World Bank on the GCF appraisal
- Informing all stakeholders of the funding cap and zero-escalation policy
The Tina River Hydropower Development Project is the Solomon Islands’ first large-scale renewable energy project implemented under a Public-Private Partnership (PPP). With a planned capacity of 15 MW, it will supply one-third of the nation’s renewable energy target by 2030.
“This flagship project is more than infrastructure — it represents a national turning point towards energy sovereignty, climate responsibility, and sustainable growth,” Minister Manu’ari said.
“Its success will set a benchmark for the Pacific in PPP delivery, project management, and community benefits.”
